Oil extends gain near $70 as Saudis vow not to oversupply market

Heesu Lee, Bloomberg

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Oil extended gains near $70 a barrel after Saudi Arabia signaled it won’t export oil beyond its customers’ needs, dispelling fears that it may flood the market.

Futures in New York rose 0.9% after gaining 2.1% in the previous three sessions. OPEC’s de facto leader Saudi Arabia, which has been under pressure from US President Donald Trump to pump more and ease prices, said exports this month will be “roughly equal” to June, and they will drop by 100 000 barrels a day in August.

Crude has retreated by almost 6% this month as the prospect of a tit-for-tat trade war between the US and China rattled global financial markets.

The US oil benchmark closed above its 50-day moving average on Thursday after slipping below that level earlier this week, while worries over potential supply losses in Venezuela and Iran as well as sporadic disruptions in Libya linger.

“While Saudi Arabia is under pressure from Trump to keep oil prices low, it probably won’t like them to be too low at the same time,” said Hong Sungki, a commodities trader at NH Investment & Securities Co in Seoul. “If it replaces the lost volumes from Iran and Venezuela, overall supplies will eventually be balanced.”